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Q2. Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2013 follow: Requirements for each finished component: RM1

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Q2. Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2013 follow: Requirements for each finished component: RM1 RM2 RM3 Finished Components C12 D57 10 pounds 8 pounds 0 4 pounds 2 pounds 1 pound 2 hours 3 hours $150 $220 Direct labor Product information: Sales price Sales units Estimated beginning inventory (units) Desired ending inventory (units) 12,000 400 300 Cost per pound Estimated beginning inventory in pounds Desired ending inventory in pounds 9,000 150 200 Direct Materials Information RM1 RM2 RM3 $2.00 $2.50 $0.50 3,000 1,500 1,000 4,000 1,000 1,500 The firm expects the average wage rate to be $25 per hour in 2013. Spring Manufacturing uses DLHs to apply overhead. Each year the firm determines the overhead application rate for the year based on the budgeted output for the year. The company maintains negligible WIP inventory and expects the cost per unit for both beginning and ending finished products inventories to be identical. Indirect materials-variable Miscellaneous supplies and tools-variable Indirect labor-variable Supervision-fixed Payroll taxes and fringe benefits-variable Maintenance costs-fixed Maintenance costs-variable Depreciation-fixed Heat, light, and power-fixed Heat, light, and power-variable Total Advertising Sales salaries Travel and entertainment Depreciation-warehouse Office salaries Executive salaries Supplies Depreciation-office Total Factory Overhead Information $10,000 $5,000 $40,000 $120,000 $250,000 $20,000 $10,080 $71,330 $43,420 $11,000 $580,830 Selling and Administrative Expense Information $60,000 $200,000 $60,000 $5,000 $60,000 $250,000 $4,000 $6,000 $645,000

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